Health Bill Could Benefit 6.6 Million Illegals, Cost $31 Billion

As President Obama addresses the nation on healthcare reform, a new analysis by the Center for Immigration Studies estimates that 6.6 million uninsured illegal immigrants could receive benefits under the House health reform bill (H.R. 3200).

While the bill states that illegal immigrants are not eligible for the new taxpayer-funded affordability credits, there is nothing in the bill to enforce this provision. Congress defeated efforts to require the use of the Systematic Alien Verification for Entitlements (SAVE) program. More than 70 other programs of this kind use SAVE.

The report is available at http://www.cis.org/IllegalsAndHealthCareHR3200. Among the findings:

In 2007, there were an estimated 6.6 million illegal immigrants without health insurance who had incomes below 400 percent of poverty, which is the income ceiling for the new affordability premium credits.

If all uninsured illegal immigrants with incomes below 400 percent of poverty received the new credits, the estimated cost to the federal government would be $30.5 billion annually.

The current cost of treating uninsured illegal immigrants at all levels of government is an estimated $4.3 billion a year, primarily at emergency rooms and free clinics.

On July 16 an amendment by Rep. Dean Heller (R-NV) that would have required the use of the Systematic Alien Verification for Entitlements (SAVE) program to prevent illegal immigrants from receiving the affordability credits was defeated by the House Ways and Means Committee.

At present 71 other means-tested federal programs require use of the SAVE system to prevent illegal immigrants and other ineligible non-citizens from accessing them.

Even though there is no mechanism to prevent enrollment, it is likely that many income-eligible illegal immigrants would not enroll out of fear or lack of knowledge of the new programs. Thus the actual costs would be less than the maximum estimate of $30.5 billion. However, if illegal immigrants are legalized and could receive affordability credits, a much larger percentage would be expected to enroll, with a corresponding increase in costs.

Uninsured illegal immigrants tend to use less in healthcare on average than others without health insurance because they tend to be young. This fact is incorporated into the current cost estimate of $4.3 billion. However, government-provided affordability credits paid to insurance companies are the same for everyone regardless of age or preexisting conditions. Therefore, the younger age of illegals does not result in lower average costs for taxpayers for this program.

It is also worth noting that the report estimates that 38 percent of illegal immigrants had health insurance in 2007. Additionally, the report estimates that there are at least 360,000 uninsured illegal immigrants with incomes above 400 percent of poverty who would not qualify for benefits under H.R. 3200.

It is also possible that illegal immigrants could benefit from the expansion of Medicaid under H.R. 3200. The bill does not require identity verification for those claiming U.S. birth. Of illegal immigrants with incomes under 400 percent of poverty, about half live under 133 percent of poverty, which is the new ceiling for Medicaid eligibility.

On July 30 an amendment by Rep. Nathan Deal (R-GA) that would have required identity variation for those claiming U.S. birth was defeated by the House Energy and Commerce Committee.

The Center for Immigration Studies is an independent research institution that examines the impact of immigration on the United States. It has no position on the health reform legislation before Congress or any other matter unrelated to immigration.